Money transfer services are widely used to transfer money and pay bills through the use of wire transfers, money orders and the like. Unlike bank account transfers, very little personal information or transaction history concerning the sender and recipient (other than identification information) is typically provided. As a result, attempts are sometimes made to use money transfers for illegal and other improper purposes, such as money laundering, payment for illicit products or services, and funding terrorist or other criminal activity.
Systems for preventing improper use of money transfers often involve developing various lists of senders, recipients, agents and countries where suspicious activity has been reported. For example, the name of a person known to be associated with money laundering may be added to a “black list,” so that any future transaction to/from the same person may be flagged for review and possible rejection. In some cases, where certain countries or other geographical locations have been known to involve higher risk of illegal activity, money transfers to or from such locations can be rejected, e.g., if the amount of the transaction exceeds a specified amount. Such lists usually rely on past patterns and behaviors that have been observed, so that when the same pattern is repeated in the future, the transaction can be stopped.
Today, large money transfer services organizations can process millions of transactions a day across the world, and hundreds of thousands of those transactions will involve first time senders and recipients. Current systems that screen transactions based on senders and recipients (and their past involvement in suspicious activity) are of little use for those first time users. A new sender or recipient may conduct several suspicious transactions before enough data has been collected to cause a transaction to be flagged, and during that time improper activity has not been stopped. Additionally, relying on suspicious senders/recipients, agents, locations, and so forth, to screen transactions will often lump many transactions together as either suspicious or not, and potentially result in some legitimate transactions being rejected (or perhaps subjected to manual review before being approved) and some improper transactions slipping through the screening.
In addition, risk factors today tend to be subjective (e.g., picking a certain country and dollar amount as being either probably safe or probably not safe), and do not take full advantage of the vast amount of data that is potentially available to assess transaction risk, or to develop rules for assessing transaction risk.